Insurable interest must exist at the time of loss for a valid insurance claim; transferring ownership voids the insurance policy.

Headnote:The Road Transport Act 1987, s 96(3) analyzes insurable interest, stating that it must exist at the time of loss. The appellant argued the insurance policy was void after the insured vehicle was sold. The Sessions Court dismissed this claim citing ownership. This Court held that possession and insurable interest are crucial, stating the 2nd respondent lost interest when she traded the vehicle. The SCJ's reasoning was found to be flawed regarding liability based merely on registration. Thus, the appeal was upheld, allowing the OS and costs were awarded.

Table of Content
1. insured vehicle details and ownership (Para 1 , 2 , 3 , 4 , 5)

[1] This is an appeal against the decision of the Sessions Court Judge (hereinafter referred to as 'SCJ') dismissing the appellant's Originating Summons No JA-B54-6-09-2016 (hereinafter referred to as 'OS') in which the appellant sought for a declaration under s 96(3) of the Road Transport Act 1987 (hereinafter refer to as 'the RTA ') that the policy insurance No J/14/ VP00/134473/JHR-51 (hereinafter referred to as 'the Policy') in respect of a motor vehicle JNF 7487 (hereinafter referred to as 'the insured subject matter') which was involved in a road accident on 24 July 2015 was void.

[2] On 3 October 2017, this Court allowed the appellant's appeal. The reasons for the decision of this Court are set down as below.

Salient Facts

[3] On 24 July 2015, the insured subject matter was driven by the 1st respondent. The 1st respondent met a tragic accident along Jalan Gelang Patah. The accident involved the 3rd respondent's husband, the 4th respondent and a pillion rider who was the 5th defendant, and the 6th respondent's son. Four vehicles were involved in the accident, namely, motorcycle MCQ 5520 which the 3rd respondent's husband rode, motorcycle JNA 5704 which the 4th respondent rode, motorcycle JQT 653 which the 6th respondent's son rode, and the insured subject matter (JNF 7487). The 3rd respondent's husband and 6th respondent's son met their fate in the accident.

[4] The 3rd, 4th and 5th respondents have respectively filed a separate action against the 1st and 2nd respondents, as the defendants, in the Magistrate Court below (suits JA-A73KJ-533-03-2016, JA-A73KJ-917-03-2016 and JA-A73KJ- 918-03-2016). The 6th respondent has filed an action in the Sessions Court below (JA-A53KJ-60-01-2016) naming the 1st and 2nd respondents as the defendants.

[5] At the material time of the accident, the insured subject matter was registered in the name of the 2nd respondent, and the insurer was the appellant, LONPAC Insurance Berhad.

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2017 MarsdenLR 3566

HIGH COURT MALAYA JOHOR BAHRULONPAC INSURANCE BERHAD – AppellantVersusMOHAMAD HAKIM ZULKIFLI & ORS – Respondent[Civil Appeal No: JA-12A-5-02-2017]

Insurable interest must exist at the time of loss for a valid insurance claim; transferring ownership voids the insurance policy.

HIGH COURT MALAYA JOHOR BAHRU
LONPAC INSURANCE BERHAD – Appellant
Versus
MOHAMAD HAKIM ZULKIFLI & ORS – Respondent
[Civil Appeal No: JA-12A-5-02-2017]